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Ukraine’s PM says Kiev ready to re-launch banking sector in Donetsk, Luhansk

April 19, 2015, 19:41 UTC+3 KIEV
Yatsenyuk said the goal of the government was to reach peace in Donbass, to "give people normal life"
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Ukrainian Prime Minister Arseniy Yatsenyuk

Ukrainian Prime Minister Arseniy Yatsenyuk

© EPA/ANDREW KRAVCHENKO/GOVERNMENT PRESS SERVICE/POOL

KIEV, April 19. /TASS/. Ukraine is ready to resume the work of the banking sector in Donetsk and Luhansk in eastern Ukraine, Ukrainian Prime Minister Arseniy Yatsenyuk said on Sunday.

"We are ready to re-launch the banking sector in Donetsk and Lugansk," he told the UKraina television channel.

He said the goal of the government was to reach peace in Donbass, to "give people normal life." Yatsenyuk noted that among the key conditions Kiev advanced for the settlement of the conflict in the country’s eastern regions was democratic local election in those regions and resuming its control at the border with Ukraine.

Marathon talks between the Normandy Four leaders - Russian President Vladimir Putin, French President Francois Hollande, German Chancellor Angela Merkel and Ukrainian President Petro Poroshenko - in Minsk on February 12 yielded a package of agreements, which in particular envisaged ceasefire between the Ukrainian conflicting sides starting from midnight on February 15.

Concurrently, the Belarusian capital hosted a meeting of the Contact Group on Ukraine involving Ukraine’s ex-president Leonid Kuchma, Kiev’s special representative for humanitarian issues Viktor Medvedchuk, the leaders of the self-proclaimed Donetsk and Luhansk People’s Republics (DPR and LPR) Alexander Zakharchenko and Igor Plotnitsky, and Russia’s ambassador to Ukraine Mikhail Zurabov and OSCE’s envoy Heidi Tagliavini, both acting as mediators.

As a result, a package of measures was adopted to implement the Minsk agreements. A separate provision of the document binds to carry out a constitutional reform in Ukraine by the end of 2015. The key element of this reform is decentralization.

Key task for the government

Ukraine’s Prime Minister said a key task for the government is to restructure a 23-billion-U.S. dollar debt.

"The key thing to be done is to restructure a considerable amount of the debt, which is now a heavy burden for the Ukrainian economy. Twenty-three billion U.S. dollars are to be restructures," he told the Ukraina television channel.

The prime minister said talks with creditors were not proceeding smoothly. "Creditors want to receive more while I want to pay less. And we will continue our discussion, I will be defending Ukraine’s national interests," he underscored.

"In these difficult conditions, we will fulfil our programme with the International Monetary Fund (IMF) to relief the Ukrainian economy from this burden and to create conditions for economic growth," Yatsenyuk said, adding that economic growth could be expected from 2016.

Ukraine has on its accounts "about 30 billion hryvnias (1.42 billion U.S. dollars under the current exchange rate), against 100,000 [hryvnias] it had last year," he noted.

Coal sector reform plan

Arseniy Yatsenyuk said he had demanded Minister of Energy and Coal Industry Vladimir Denchishin come out with a coal sector reform plan.

"I demanded the minister present his vision of how they plan to reform the coal sector," Yatsenyuk said in an interview with the Ukraina television channel. "It is not to be a chamber discussion, it is to be an open discussion about the future of the coal sector."

The prime minister said Kiev had lost 55 out of 90 mines as a result of the conflict in Donbass. That is why, in his words, a number of electricity plants were short of coal.

"We have lost basic coal brands used by electricity plants. Ukraine is dependent on these coal brands," he admitted.

He said the remaining state-owned coal mines were very inefficient. "An average price at state-run mines is 2,100 hryvnias per one tonne (almost 100 U.S. dollars under the current exchange rate), while electricity tariffs are based on a price of 1,100 hryvnias," he noted. "Who will compensate for one thousand hryvnyas?"

He admitted wage arrears to coal miners employed at state-run mines. Earlier, Ukraine’s government allocated 400 million hryvnias (19 million U.S. dollars) to pay delayed salaries.

"But this is a fire fighting operation, this is not a systemic solution to the problem. A systemic solution means first to adopt a real plan of the coal sector reforms, second, to adopt market-grounded tariffs," Yatsenyuk said, adding it was necessary to develop certain most promising mines, to carry out privatization, mothball or wind up some coal sector facilities. "But concrete calculations are needed for that. This is what I told the minister [Demchishin]," the prime minister said, adding that otherwise "miner will be back here knocking their helmets at the heads of the ministers, and they will be right."

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